The Ninth Circuit Court of Appeals, in overturning the FTC's action against AT&T for throttling the speeds of unlimited data customers, ruled that the exemption is not confined only to common carrier "activity" by an entity that has the status of a common carrier, but to noncommon carrier activity by that entity as well.

That suggests that an edge provider, say, could skirt any privacy regs by merging with a common carrier -- Yahoo and Verizon, for example -- because the FCC's reclassification of ISPs as common carriers triggered that exemption, while the FCC says it does not have authority over edge providers.

The FTC had claimed that the exemption was activity based, so that it only applied to common carrier activities undertaken by common carriers. That left the FTC free, or so it thought, to regulate the mobile broadband of AT&T, which at the time of the action was classified as a non-common carrier service.

The district court, in refusing AT&T's request that the FTC case against it be dismissed, had concluded that the exemption applied “only where the entity has the status of common carrier and is actually engaging in common carrier" activity.

Ramirez pointed out that the FTC supports getting rid of the exemption altogether. She called it "absolutely outdated."